Dalian and Singapore iron ore futures surged past $130 a tonne on Tuesday after the world’s largest listed miner, BHP Group BHP.AX, flagged a brightening demand outlook in top steel producer China.
BHP’s confidence in China’s economy was buoyed by green shoots since the start of the calendar year, including new loans, house prices and business sentiment surveys, Chief Executive Officer Mike Henry said.
The most-traded May iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 3.4% higher at 919 yuan ($133.80) a tonne. It earlier hit 922 yuan, the strongest for the Dalian-traded commodity since July 2021.
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On the Singapore Exchange, the steelmaking ingredient’s benchmark March contract surged by more than $11, or about 9%, to $139.80 a tonne, the highest since last April. It was up 2.2% at $131.20 a tonne by 0700 GMT.
“Fragile shoots of an emerging Chinese steel demand recovery appear to be slowly developing strong roots, as bullish high-frequency data extended into a second consecutive week,” Navigate Commodities Managing Director Atilla Widnell said in a note.
“If this trend extends for a third consecutive week – and there’s little to suggest otherwise – this should continue to reinforce the renewed optimism around China’s reopening narrative.”
Rebar SRBcv1 on the Shanghai Futures Exchange climbed 2.1%, hot-rolled coil gained 1.4%, wire rod SWRcv1 rose 3%, and stainless steel SHSScv1 added 1.6%.
Other Dalian steelmaking inputs such as coking coal and coke rose 3.8% DJMcv1 and 2.2%, respectively.
Iron ore broke past the $120-$130 trading range it had been confined to for weeks, with traders brushing aside a fresh reminder from regulators about ensuring market stability, and portside stockpiles hitting a five-month peak.
Source: Reuters (Reporting by Enrico Dela Cruz in Manila; Editing by Vinay Dwivedi and Sherry Jacob-Phillips)